Marketing Costs vs Returns: Is Your Marketing ROI Plan Really Working?Mar 24,2021 / Marketing Strategy
Marketing done right is rarely going to be cheap, but it’s well worth the cost if you’re making a major return on that investment. However, how do you know if you’re getting your money’s worth in this regard? What’s more, how much is too much when it comes to spending on marketing? Let’s look at some tips and tricks on for tracking your marketing ROI and what you can do to make the most out of your marketing.
Understanding Marketing ROI
A return on investment (ROI) means that you’re turning a profit on your business by making more money than you’re spending to keep things running. For marketing, your ROI will be the amount of money you make from sales due to your marketing minus the amount of money you spent on your marketing for a specific campaign. As one would expect, this isn’t always as clear-cut as we may like it to be given how unclear it sometimes is as to the effects of specific marketing on lead conversion. With so many things going into it and so many differences in terms of a successful campaign from business to business, it’s hard to create many truly universal standards to measure marketing ROI. That said, there are a few things you can look for to get a general sense on how well your marketing campaign is performing, such as:
1. Remember Your Goals
To begin with, you can remind yourself of what your exact goals are meant to be at the end of a campaign when you’re determining your marketing ROI. If these are fairly simple and defined (i.e. grow your sales by X% by the end of the month), it would be easy to tell whether or not you succeeded in this regard. Unless there have been some serious costs elsewhere, this in and of itself should also be an indicator of increased profits and, therefore, a much higher ROI for the campaign.
2. Check the Stats
While not applicable to all forms of marketing, customers that come to your site through blogs, online ads, and similar portals can be tracked through website statistics. By comparing the number of clicks on particular links to the amount of sales you’ve made for advertised products (or products generally), you can estimate about how well a particular campaign is performing. As an example, if 25% of people who read a particular blog also clicked through on the CTA link and bought something, that would be a fairly successful campaign.
3. Factor in Time + Effort
The monetary value of your campaign isn’t the only thing that must be measured to understand your ROI; there’s also the time and effort involved in running things. Cheap campaigns are always nice, but a cheap campaign that requires hours upon hours of work to maintain needs to create a massive return in order to justify itself. Likewise, you can’t expend Herculean amounts of effort in creating or running a campaign just for a meager increase in profits. A good marketing ROI can balance bigger profits with sustainable levels of time commitment and effort utilized.
4. Non-Money Returns
While they shouldn’t be prioritized over increased earnings, returns in forms other than money can also be a measure of success for a campaign. An increased follower count on social media or viral posts bringing in more attention are both good results of your marketing, as these new eyes on your account are likely to become sales in the future.
Tracking your marketing ROI can be tricky if you don’t know what to look for. Remember what we’ve discussed today to better understand your campaigns and whether or not what you’re doing is really effective at boosting your company.
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